Respuesta :
increasing returns to scale.
What is aggregate production ? How to calculate aggregate?
Since economists Cobb and Douglas initially computed and presented the aggregate production function (CDPF) in the late 1920s, it is also known by this name. It immediately demonstrated its importance. For instance, Robert Solow developed his Solow growth model and its following growth formula using Cobb-Douglas functions. An economic model that determines long-term economic growth is the Solow-Swan model, sometimes referred to as the exogenous growth model. The growth of labor or population, a rise in productivity, and capital accumulation are the main drivers of technological innovation. These elements are taken into account by this production function to explain long-term economic growth.
Y = A*F (K, L) (K, L)
Another way to write it is as follows:
Y = AK0.25 L0.75
Y stands for the real GDP, or total output in an economy.
A stands for the technology component. It is a gauge of total economic production.
K represents the economy's entire non-human capital input. It is expressed in terms of money or monetary units.
L represents the total workforce in the economy (human capital).
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